MiFID II - Independent investment advice

The revision of MiFID I leads to important changes in rules and regulations with regard to investor protection. The investor protection is enhanced due to stricter and new rules of conduct under MiFID II.

MiFID II makes a distinction between advice on an independent basis and on a non-independent basis. Before providing advice, an investment firm must inform a client whether this advice is being provided on an independent or a non-independent basis. 

Firms that provide investment advice on an independent basis will generally not be allowed to receive inducements and are required to assess a sufficient range of financial instruments or structured deposits in the advice. Different types of financial instruments offered by various providers must be included in the independent advice. Independent advice may not be limited to financial instruments that are issued or provided by the investment firm itself or related entities. If the advice does not satisfy these requirements, then the advice is not independent.

The qualification of advice is also of important for the manner in which the  inducement rules apply.

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